FICCI survey suggests that higher production costs impact manufacturing competitiveness

According to the latest survey of the Federation of Indian Chambers of Commerce and Industry (FICCI), the rising production costs significantly impacted the manufacturing competitiveness in the last few months.

FICCI's latest quarterly survey on manufacturing highlights that there is a perceptible decline for the manufacturing sector outlook in the Q4 (January-March) of the last fiscal, as the percentage of respondents reporting higher production and exports in fourth quarter have declined vis-a-vis previous quarter.

However, it is also notable in the survey that the percentage of respondents reporting lower production has reduced by half over the previous quarter thereby indicating a more stable outlook in months to come.

The proportion of respondents reporting higher growth during the January-March 2017 quarter has slightly fallen from 48 percent in October-December 2016-17 to 46 percent.

FICCI's latest quarterly survey assessed the expectations of manufacturers for Q-4 (January-March 2017) for twelve major sectors namely auto, capital goods, cement and ceramics, chemicals, electronics & electricals, food products, leather and footwear, machine tools, metal and metal products, paper products, textiles and technical textiles and textiles machinery.

Responses have been drawn from 320 manufacturing units from both large and SME segments with a combined annual turnover of over Rs. 3.8 lakh crore.

In terms of order books, almost 47 percent respondents in January-March 2017 quarter as compared to 48 percent respondents in October-December 2017 quarter, reported higher order books which is almost the same.